Despite his opposition to it, US President Barack Obama signed an executive order that begins putting into effect across-the-board USD 85 billion budget cuts known as the "sequester" resulting into growth cut by over one-half of one per cent and cost about 750,000 jobs.
Obama singed the order late yesterday night reluctantly after he and the Congressional leadership those from the Republican party failed to arrive at a consensus on budgetary cuts and how to address the issue of deficit.
Obama has said the cuts will harm the economy, force thousands of people from their jobs, and hurt military readiness.
The sequester is "dumb" but is "not going to be an apocalypse," Obama said after his nearly hour long meeting with the Congressional leaders.
"At a time when our businesses have finally begun to get some traction -- hiring new workers, bringing jobs back to America -- we shouldn't be making a series of dumb, arbitrary cuts to things that businesses depend on and workers depend on, like education, and research, and infrastructure and defence.
"..It's unnecessary. And at a time when too many Americans are still looking for work, it's inexcusable," Obama said. All of this will cause a ripple effect throughout theeconomy, he said adding that layoffs and pay cuts means that people have less money in their pockets, and that means that they have less money to spend at local businesses.
"That means lower profits. That means fewer hires. The longer these cuts remain in place, the greater the damage to our economy -- a slow grind that will intensify with each passing day," he said.
"So economists are estimating that as a consequence of this sequester, that we could see growth cut by over one-half of 1 per cent. It will cost about 750,000 jobs at a time when we should be growing jobs more quickly.
"..So every time that we get a piece of economic news,over the next month, next two months, next six months, as long as the sequester is in place, we'll know that that economic news could have been better if Congress had not failed to act," Obama said.
And this is happening because of the Republicans he alleged. "None of this is necessary. It's happening because of a choice that Republicans in Congress have made. They've allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole to help reduce the deficit," he said.
"As recently as yesterday, they decided to protect special interest tax breaks for the well-off and well-connected, and they think that that's apparently more important than protecting our military or middle-class families from the pain of these cuts," he said.